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Which of the following is true for a firm in long-run equilibrium in monopolistic competition?

Which of the following is always true about a negative externality?

Which of the following actions is most likely to reduce the degree of income inequality within a society?

To correct for positive externalities, the government should

The socially optimal quantity of a public good is provided when

Assume good Z  is produced in a competitive output market that is in long-run equilibrium. In the short run, the variable input is unskilled labor whose wage is determined in a competitive labor market. Suppose there is an increase in consumer demand for good Z. Which of the following explains the resulting change in the labor market for unskilled workers in the short run?

Assume that the market is a profit-maximizing monopoly.Which of the following areas shows the consumer surplus? The figure presents a graph with the origin labeled 0. The horizontal axis is labeled Quantity, and Q sub 1 and Q sub 2 are indicated. Q sub 1 lies about one third of the way across the horizontal axis. Q sub 2 lies to the right of Q sub 1 about one half of the way across the horizontal axis. The vertical axis is labeled Price comma Cost, and P sub 0 and P sub 1 are indicated. P sub 0 lies about one third of the way up the vertical axis and P sub 1 lies above the P sub 0 about half way up the vertical axis. Dashed vertical lines extend from the horizontal axis upward from Q sub 1 and Q sub 2, and dashed horizontal lines extend from the vertical axis rightward from P sub 0 and P sub 1. The lines from Q sub 1 and P sub 1 intersect at a point labeled B. The lines from Q sub 1 and P sub 0 intersect at a point labeled C. The lines from Q sub 2 and P sub 0 intersect at a point labeled E. A point labeled F is on the vertical axis slightly above the origin and well below P sub 0. An upward sloping straight line labeled M C is drawn from point F to point E and continues as a straight line beyond point E. A point labeled J is located at the intersection of the vertical dashed line at Q sub 1 with the M C line. A point labeled A is located on and near the top of the vertical axis. A downward sloping straight line begins at point A, passes through both point B and point E, and it ends just above the horizontal axis. This downward sloping line is labeled D. Another downward sloping straight line also begins at point A passes through point J, and ends slightly above the horizontal axis. This line is labeled M R..

Table: Workers, Wages, Marginal Costs and Revenue Number of Workers Hourly Wage Marginal Factor Cost Marginal Revenue Product 10 $5.00 11 $5.10 $6.10/hr $8.70/hr 12 $5.20 $6.30/hr $7.60/hr 13 $5.30 $6.50/hr $6.50/hr 14 $5.40 $6.70/hr $5.40/hr 15 $5.50 $6.90/hr $4.30/hr According to the information in the table above, the twelfth worker would increase the hourly profit by

TechFlow, a profit-maximizing firm, has a patent on a computer accessory, making it the only producer of that computer accessory. The following graph shows TechFlow’s demand, marginal revenue, average total cost, average variable cost, and marginal cost curves. This graph illustrates TechFlow’s market as the sole producer of a patented computer accessory. The vertical axis shows price and cost in dollars, ranging from $20 to $60, and the horizontal axis shows quantity. The graph includes a downward-sloping demand curve and a downward-sloping marginal revenue curve below it. It also features a U-shaped average total cost curve, a U-shaped average variable cost curve below it, and an upward-sloping marginal cost curve intersecting both. Horizontal dashed lines indicate prices at $20, $22, $33, $39, $50, and $60, while vertical dashed lines mark quantities from 0 to 98 units. The graph helps illustrate TechFlow’s pricing, production, and cost relationships as a profit-maximizing monopolist. Use the information from the graph to answer questions a-e. Identify the quantity that maximizes TechFlow’s profit. Explain. (2 points) At the quantity identified in part (a), does TechFlow earn a positive economic profit, a negative economic profit, or zero economic profit? Explain. (2 points) Calculate TechFlow’s total revenue if the firm produces the allocatively efficient quantity. Show your work. (2 points) At a price of $60, will TechFlow continue to produce or will it shut down in the short run? Explain. (2 points) Assume that at 74 units, the average total cost is $62. If the total rent paid by TechFlow increases by $370, calculate the firm’s new average total cost at that output. Show your work. (2 points) Assume that TechFlow’s patent expires. DigitalMax, a company with the capability to produce the same computer accessory as TechFlow, intends to enter the market and charge a lower price than TechFlow for the computer accessory. TechFlow is considering whether to maintain its price or to lower its price to match DigitalMax’s price. DigitalMax is considering whether or not to advertise its entry into the market. The following matrix shows the payoffs for each combination of strategies, and both players (TechFlow and DigitalMax) have complete information. The first entry in each cell represents TechFlow’s payoff and the second entry represents DigitalMax’s payoff. Each player independently and simultaneously chooses its strategy. Use the matrix provided below to answer questions f-h. Table: TechFlow and DigitalMax Payoff Matrix DigitalMax Not Advertise Advertise Tech Flow Lower Price $3000, $4500 $4000, $3500 Maintain Price $2000, $2500 $1800, $7500   Does TechFlow have a dominant strategy? Explain using numbers from the payoff matrix. (2 points) Identify the Nash equilibrium. Explain why this is a Nash equilibrium using information from the payoff matrix. (4 points) Suppose DigitalMax makes a credible commitment to TechFlow that if TechFlow maintains its price, then DigitalMax will pay TechFlow $600. Will this offer result in a Nash equilibrium with different strategies from those identified in part (g)? Explain using numbers from the payoff matrix. (4 points)

When consumption of a good generates a positive externality, which of the following must be true at the market equilibrium?